Captive Power in India 2018

Captive power has played an important role in meeting power needs for a number of energy-intensive industries such as:

Steel

Aluminium

Petrochemicals

Textile

Cement

Fertilisers

Sugar

Chemicals

High industrial power tariffs, the need for continuous high quality power, besides an opportunity to sell excess power in short-term power trading have been some of the key growth drivers for the captive power sector.

There is a growing demand for captive units in the service sector industries such as hotels, hospitals and other institutional users. There has also been significant traction of the group captive model wherein several power consumers in commercial and industrial clusters come together (with or without an external investor) and set up large captive power plants to achieve economies of scale.

The new rules for group captive are also expected to prevent any misuse of such plants by focusing ownership on value of capital along with voting rights instead of number of shares only.

Fuel-wise, while coal and gas have been the major fuel for power generation, renewable sources in recent years, are increasingly being adopted by captive power producers, owing to falling costs, and other benefits such as net metering being available besides helping captive owners meet their renewable purchase obligation commitmentswith key players and relevant people in the sector are mainly conducted. They are mostly via telephonic as well as personal interviews.